JP Morgan Layoffs: Is JPMorgan Chase laying off employees?

JP Morgan Layoffs

JPMorgan Chase is the most recent business to add its name to the list of ongoing tech layoffs. In May 2023, the largest U.S. lender intended to cut 500 positions. Employees in all departments are anticipated to be affected by the layoffs.

According to reports, the expected layoffs at JPMorgan will impact workers in all of the bank’s primary divisions. This covers operations, technology, consumer, business, asset, and wealth management. Yet, the company has not officially announced the impending layoffs.

The bank’s workforce reductions would affect approximately 1,000 employees of First Republic Bank, which JPMorgan just bought. A source at JPMorgan claims this news. Let us view the layoffs at JPMorgan in the article that follows.

About the company

JPMorgan Chase & Co. is a Delaware-based multinational American financial services company. Its headquarters are in New York City. It is the biggest bank in the U.S. and globally by market capitalisation as of 2023.

The Financial Stability Board views the company as having systemic importance. It’s because it is the largest of the Big Four banks. Due to its size and scope, regulatory control has frequently been strengthened. Also, an internal “Fortress Balance Sheet” of capital reserves is being maintained.

The company will relocate to the JPMorgan Chase Building in 2025. The shift is from its current headquarters at 383 Madison Avenue in Midtown Manhattan.

What happened to the JPMorgan Chase?

The business acquired “the large majority of assets” and inherited the deposits of First Republic Bank on May 1, 2023. This made it the second-largest bank collapse in history after JPMorgan purchased Washington Mutual fifteen years prior.

According to the terms announced by JPMorgan Chase & Co., it will remove a $5 billion deposit it had made with First Republic. Also, pay the Federal Deposit Insurance Corporation a $10.6 billion payment. Along with that was the return of $25 billion in funds that other banks had deposited with First Republic in March. These were done as part of a lifeline deal with the U.S. Department of Treasury.

According to a May 2023 CNBC story, JPMorgan Chase was creating IndexGPT. It is a new artificial intelligence-based tool for investment managers.

This would use cloud computing software and a “disruptive form of artificial intelligence.” This is to choose investments for clients, according to a trademark filing. Given the filing requirements, this action was a clue that the bank expected to release a product soon. It also occurred when financial institutions were developing ChatGPT and this technology.

This happened when the company was cutting jobs, including those in technology. The company underlined its commitment to A.I. and developed a model to identify prospective changes in Federal Reserve policy.

Layoffs at JPMorgan will include tech positions

JPMorgan employs around 300,000 people worldwide. It will cut positions in the operations and technology areas. In May 2023, JPMorgan Chase, the biggest lender in the U.S., would reduce its employees.

According to reports from CNBC and Reuters, various departments are laying off about 500 workers. The layoffs will affect several JPMorgan businesses, including consumer banking, commercial banking, asset and wealth management, and technology and operations. The bank is continuing its attempts to streamline its processes. Thus, adjustments to changing market conditions are reflected in these reductions.

As do many other financial organisations, JPMorgan regularly reduces employees throughout the year. Also, it simultaneously employs thousands of people to fill various positions.

The source also disclosed that JPMorgan has over 13,000 job openings despite the recent layoffs. This demonstrates that the bank is still committed to strategic expansion. It is still seeking talent in particular fields consistent with its long-term goals. JPMorgan has not yet issued a formal statement about the layoffs.

Separately, it was revealed that JPMorgan is also cutting jobs at First Republic Bank. As we know, it’s a business it recently bought after the latter’s failure. First Republic Bank became the most significant U.S. lender to fail since the 2008 financial crisis following its takeover by regulators. It again followed a sale to JPMorgan in early May. These layoffs at First Republic Bank are anticipated to affect 1,000 workers.

According to a regulatory filing, JPMorgan had 296,877 employees as of the end of the first quarter. It is a rise of 8% over the prior year. Despite the present layoffs, this statistic shows the bank’s consistent growth over the last 12 months.

JPMorgan Chase announced recent layoffs

On July 11, 2023, a worker adjustment and retraining notification, or WARN, was sent. Accordingly, JPMorgan Chase disclosed plans to drop some employment at its Jersey City, New Jersey, location. The notice specifies that the anticipated layoffs will take place in September 2023.

According to JPMorgan, “only a small number of local personnel are affected by the layoffs. Also, attempts are being made to reallocate these individuals. Our strategy hasn’t changed, and we run the business with the intention of making investments at different times of the year. We’re constructing for the long run and will continue to spend money on hiring, training, and technology. The bank stated that the 63 layoffs are a regular part of a review”.

JPMorgan stated that it presently has 560 openings in New Jersey and is working to find new employment for the affected employees. Twelve thousand individuals work for the bank in New Jersey. According to American labour law, a WARN is required for businesses with 100 or more employees. It is necessary to give 60 days’ notice before closing a plant or mass-firing employees.

As stated, the bank considered terminating 500 employees from several divisions in May. Following a decline in dealmaking operations, the largest U.S. lender cut 40 investment banking positions in June.

Due to the current state of the economy, rival banks have also had to make layoffs in their investment banking units. This includes Goldman Sachs Group, Morgan Stanley, and Citigroup.

Despite these layoffs, investment banks have been on a hiring rampage globally. This was done to profit from Silicon Valley Bank’s failure.

Doug Petno, chief executive of commercial banking at JPMorgan, told the Financial Times that

It was “very unusual to have this monopolistic player go away overnight.” “We are ready for business, and we think we can prevail in the end.”

The bank has added roughly 20 new bankers in the U.K. to its $847 million revenue offshore commercial banking business that works with startups. In addition to the recent hire of 10 specialists in Israel, there will be an expansion.

John China is a former senior executive at SVB. He has also joined the bank to co-lead its innovation-focused business division in the United States. Additionally, there are plans to strengthen its presence in many Asian offices.

The workforce at JPMorgan Chase is expanding

JPMorgan reported that its employees had expanded overall by roughly 8% from this time last year. It’s also an increase of around 1% from the previous quarter to more than 300,000. It was revealed during its second-quarter earnings call on July 14. Despite the constant stories about industry layoffs and mergers, jobs have increased across all sectors.

The consumer and community banks saw the most headcount growth. It added over 1,000 staff members this quarter and over 6,000 since last year. Today, JPMorgan has a larger population than other sizable U.S. cities, such as St. Louis, Missouri. It’s only the most recent example showing how important scale is in the financial world, particularly during difficult economic times.

Due to the purchase of First Republic, JPMorgan’s workforce is expected to increase this year. After the quarter ended on July 2, around 5,000 First Republic staff members joined JPMorgan in a formal capacity.

The expansion comes at a challenging moment for Wall Street banks. They have been preparing for more widespread loan defaults. It’s particularly prevalent in commercial real estate. They are also experiencing a reduced ability to assist big businesses with M&A and IPOs.

Conclusion

JPM officials recently cited “higher compensation, including front-office hiring and technology investments.” These factors are behind the commercial banking sector’s 12% year-over-year expense increase. These were told when describing the 2Q headcount growth. To counter fintech competitors, the bank has been heavily investing in technology.

Jeremy Barnum is the CFO of JPMorgan. He stated that despite solid results, the company is “concentrated on the significant risks. They are related to the economic outlook, competition for deposits, and the effect on capital of the awaiting finalization of the Basel III rules. But we will remain optimistic about the firm’s capacity. This enabled us to continue delivering outstanding results through many scenarios.”

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